CHA joins critics of housing voucher plan

6224 S. King Drive is one place in Chicago where residents with federal vouchers live.

A federal proposal aimed at alleviating housing segregation faces resistance from an unlikely source: the Chicago Housing Authority, which worries that the move could hurt, not help, poor people who live in subsidized housing.

The CHA criticized the plan by the Department of Housing and Urban Development to make it easier for people who rely on federal vouchers to escape from impoverished, violent neighborhoods and move to safer places with better jobs and schools. HUD wants to change the way it calculates rents for its voucher program to remove obstacles for public housing residents who want to live in wealthier parts of town.

Yet that change could have "unintended negative effects" by reducing the amount of housing available to voucher holders, according to a CHA document sent to HUD. In poor Chicago neighborhoods, many landlords would receive lower rents under the change, which could discourage them from participating in the voucher program, wrote Kathryn Ludwig, the CHA's chief housing choice voucher officer.

"Chicago is experiencing significant increases in property taxes, utility taxes, water rates and sanitation fees," Ludwig wrote. "If property owners are not able to recoup these expenses from their rents, CHA fears they will opt out of the (voucher) program, leaving voucher families with fewer options."

The debate over the proposed rule underscores the predicament facing government officials as they try to end the cycle of poverty in urban areas: Do they address the problem by increasing investment in poor, high-crime neighborhoods? Or do they just help poor people escape to greener pastures?

The answer may be some combination of the two. But many critics of the proposed rule, including the apartment lobby, argue that it could lead to further decay in struggling neighborhoods that need more investment, not less.

The change would "hinder efforts to revitalize these neighborhoods, resulting in disinvestment," Jack Markowski, president of Chicago-based Community Investment Corp., wrote in a letter to HUD. "This would harm residents both with and without vouchers who choose to remain in those communities."

Under the federal Housing Choice Voucher program—also known as Section 8—qualified voucher recipients must pay 30 percent of their income, if they have any, for rent and utilities. The vouchers cover the difference between that amount and the full cost of renting the apartment or home.

HUD currently caps the rent it will pay based on a fair market rent for the entire Chicago area. Concerned that a metro-area rent—currently $1,176 for a two-bedroom apartment in Chicago—isn't high enough to cover the cost of living in more prosperous parts of town, HUD wants to start calculating a fair market rent for each ZIP code, believing it would increase mobility and decrease segregation.

"In some areas of the country, the Housing Choice Voucher Program offers little choice to families about where they can live, limiting opportunities for themselves and their children," HUD Secretary Julián Castro said in a statement in June. "We propose to use a tested new approach that would offer these households greater choice to move into higher-opportunity neighborhoods with better housing, better schools and higher-paying jobs."

The change could achieve that goal, but it also would result in lower maximum rents in poor parts of the South and West sides. In the 60637 neighborhood, which includes Woodlawn, Washington Park and Hyde Park—the ZIP code with the most housing voucher holders in the city—HUD's two-bedroom fair market rent would be $990, a 16 percent decline from the current metro-area amount.

The CHA estimates that nearly 34,000, or 74 percent, of its voucher holders, would see a decrease in the rent the authority could pay, meaning they would have to move to a less-expensive apartment or pay more to stay put.

"While moving to a new unit can sometimes offer great opportunity for families, under forced circumstances, it can be a very disruptive and destabilizing event, especially for families who may not be able to afford all the costs associated with moving to a new unit, including application fees, security deposits and moving their belongings," Ludwig wrote to HUD.

The CHA and more than 100 other groups provided their feedback on the rule change during a public comment period that ended Aug. 15.

"We are reviewing this public comments to determine what our next step might be," said HUD spokesman Brian Sullivan.

CHA CEO Eugene Jones declined to comment.

Supporters of HUD's proposal include the Housing Authority of Cook County, which covers suburban Cook County and has been testing a ZIP-code level approach since 2013.

The change has "expanded housing choice for our participants, which would otherwise have been nearly impossible," Sheryl Seiling, director of rent assistance, wrote in a letter to HUD. "While it was administratively burdensome to implement . . . it was worth every effort it took."

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